Justin Donald – The Lifestyle Investor

Transcript of Justin Donald interview by Alan Olsen, Host of the American Dreams Show, “The Lifestyle Investor”:

Alan: Hi, this is Alan Olsen and welcome to American Dreams. My guest today is Justin Donald, welcome to today’s show.


Justin Donald: Thanks, Alan Great, to be here excited to hang with you and talk with your audience.


Alan: Well, I’m really excited, Justin, you’ve- you’ve made some landmark choices in your life. And now you’re putting that secret recipe out there and in books and podcasts and helping people understand that of lifestyle investing. But before we get into that, I’d like to step back and… give us- give the audience your timeline of life, how you started your career and how you got to where you are today?


Justin Donald: Sure, well, I think probably the best way to share how I got started was with the fact that as a young kid growing up in a very, you know, middle income, lower middle income type of area, I really had this strong desire for more. And I didn’t see a whole lot of it with the people that we knew, I didn’t know any successful entrepreneurs at the time, I didn’t know any investors, I just I didn’t know a lot of people who didn’t work, just a common job. And not that there’s anything wrong with that. It’s just not what I wanted to do. You know, I didn’t, I love my parents tremendously, but I didn’t want to kind of take the blue collar route and work a lot of hours and just get paid for my time. And so I resorted to the only thing I knew where I could learn from the best of the best if I didn’t know them, I just read their work. So at a young age, I started reading, and I read, I mean, anyone and everyone that fascinated me, people, you know, entrepreneurs, investors, you name it. And that really became kind of like the training ground for me to realize I could do it, that I could use these role models, and I could just copy the people that I’m reading, and I could create that in my life. And that’s certainly what I did. And I eventually met more people doing what it was that I wanted to do. But it just took some time because I had to be very intentional. I had to like to go to events where those people might be and just, you know, happen to have a random conversation with them. Or at least that’s probably how it seemed to them. To me, it was very intentional. And I had someone on my list and I wanted to go talk to them. So that really is it. And you know, earlier in my career I did some sales. You know, I sold newspaper subscriptions door to door as a young kid, but I did it horribly at first. And then I actually figured out how to do it well. And so I did that from seventh grade until my senior year of high school once I graduated technically. And then I started working with a company called Cutco and I sold the Cutco product line on an in person appointment basis, referral basis. And that’s how I paid my way through the University of Illinois. And while I was at the University of Illinois, I got exposed to yet again, this additional layer and depth of wisdom and education, because the business program at U of I has been known for years for a long time for being a top business program because they bring in adjunct professors that actually walk the talk. It’s not just the theory of investing in the theory of entrepreneurship. I mean, it’s someone who’s really doing it. And so that was incredibly impactful for me to learn arbitrage strategy at a young age and real estate and insurance and wealth creation. And I got selected to be one of 20 students in the School of Business at U of I to manage a million dollars of investable dollars in the stock market from an alumni and that was I mean that was kind of my first real step into investing.


Alan: You know it’s- it’s- it’s interesting, I think a lot of what I’m hearing there Justin is you went through your path and you learned along the way, obviously it was a passion of yours too- of problem solving and learning how to invest and create the lifestyle that- that you have today. So eventually you did pretty well. I mean you made a landmark there as you, as you launched in- what- At what point did you find financial independence was starting to happen?


Justin Donald: So for a while out of college, I really, you know, kind of grew with the Cutco organization and moved into a bunch of different roles with them and ended up doing fairly well where I was making good income on my time. But I knew that I didn’t want my time to be the sole provider of my income. And ideally, I didn’t want it to be any provider of my income unless I chose it to be I wanted to figure out how to buy assets that produce income or get my capital working. And so what I did is I started being really aggressive with how much I earned. And I started investing 50% of the income that I brought in at any given year, any given commission just in general, that was what I was going to put towards investing at first into real estate, because I didn’t know really how to vet anything else. And in fact, at that time, I really didn’t know how to vet that until I went to a boot camp that taught me how to do it. And I started investing in mobile home parks, I had a couple friends that were doing that, and they had done well. And it sounded weird. And when they wanted me to do it earlier, I was like, How do I know how I don’t know, I was expecting, you know, in my mind, I felt like I wanted to be in you know, a different type of multifamily. And, once I started looking at the numbers, I started seeing the cash flow potential. And I looked at my first deal, and I thought, Oh, my goodness, if I buy this park, I can replace my wife’s income. So she doesn’t have to work. She was a teacher at the time. And she taught high school business classes. And so I ended up buying that park to replace her income and bought another park that replaced our bare minimum expenses. So just what it cost us to survive, not the lifestyle we had, it wasn’t covering what you know, eating out or traveling, but it covered all of our bills. And then I bought one more Park and that one covered our lifestyle. And so it really you know, it’s kind of like stages, you know, the first stage was financial survival. And then the second stage was kind of financial independence, you know it with a good quality lifestyle, nothing changed. So I was able to step away from what I was doing, and really not have to work. And from there, I just kept buying more properties and really kind of moving into the lifestyle that we always dreamed of having. And in time, we just had so much cash flow that we had to find new places to put it. It was hard to get as many deals in the mobile home park industry as I wanted to get. And I was noticing that there was some cap rate compression. So I figured it was time for me to be a student to learn more in alternative investing. And so that’s what I did, I started studying how to invest in companies. And I started partnering up with people that did that. And I you know, I wanted to get in the, you know, in the nitty gritty of the details was someone that knew it. And I did have a background because at one point in time, I started a company with a couple of friends that really took off, we ended up getting a series A round of funding and the company is quite valuable today. And that was bootstrapped from the ground up. So I had some knowledge, but partnering and learning from entrepreneurs and real estate investors to figure out what else I can do and how else I could diversify my portfolio has been epic. And so at this point, I’m in every real estate asset class or I have been that exists, unless it’s super obscure. And then I’ve invested in a lot of companies, a lot of founders, I do a lot of debt deals. There’s all kinds of unique structures that are out there. So I like funds. I like syndications. I like opportunities where you can structure unique deals. So maybe it’s a rev share model, or maybe it’s a profit interest. Or maybe there’s some sort of equity kicker for free above and beyond what the investment or the loan is for.


Alan: You know, it’s, you know, I’ll say this that many of your investments don’t follow the conventional Wall Street practice. And you mentioned that you will often collaborate with others that you can trust on uncertain investments, but in particular, you and you brought real estate up, but when you’re looking at investments today, what do you look for? How do you know it’s that good investment or it’s undervalued, and it’s going to be a significant return?


Justin Donald: Well, that’s an absolutely great question and one of the things I had my friends for years, you know, begging me to write a book on this and I just kept putting it off and putting it off and putting it off. And finally I did you know I wrote the lifestyle investor the 10 commandments of cash flow investing for passive income and finding Mental freedom. And so basically I look at it through the lens of those 10 commandments, they’re my 10 criteria on why I would invest, or what I need to see in order to feel comfortable investing. And one of them is that, you know, the first one is that it’s lifestyle, focus that it’s not going to take me away from my lifestyle, it’s not going to put more work on my plate. Unless I’m in a season of life where the work that I am doing there is better than the work that I’m currently doing. And at this stage, you know, early on, that was the case, I’d rather do real estate than work for someone else. But at this point in time, I really just want my capital working for me, or my network. So that’s, that’s really kind of the focus there. And then my second commandment is to risk the deal. So I’m always looking for ways to mitigate risk. So if something happens, and it doesn’t work out, but at least get my money back, if you lose money, that’s a forever lost opportunity cost. And for me, I don’t want to lose, like, I’m okay, if I don’t get a great return. I just don’t want to lose money. So I’m not looking for the home run, I’m looking for a single or a double. But with the protection that, like, if stuff just really goes wrong. They’re gonna say, Hey, sorry, it didn’t work out. But here’s your initial investment back.


Alan: You know, a lot of people talk about leverage and debt, what was your feeling on a leveraged investment?


Justin Donald: There’s good debt, and there’s bad debt, you know, high interest debt, if you owe it is not good, you know, high interest debt, if you own it is good. I think low interest debt, if you own it, that’s good. So for example, we’ve got record lows for interest rates right now for buying real estate for buying a primary residence specifically, but I mean, really most forms of real estate. So to me, it’s crazy not to use debt to your advantage, you know, if you can get 2.5%, or 275, or maybe you’re at three, or three and a quarter somewhere in there. I mean, these are all record lows, so to go then invest something, invest those dollars into something that’s earning 10% or 15%, you’re making that margin that delta there, and that’s the total arbitrage, you’re using someone else’s money, you’re paying them their interest, so they’re winning, but you’re getting a greater return than what you’re paying. So you know, for the right debt in the right scenario, where you’re investing in something that’s very safe. I think it’s incredible.


Alan: You know a person picks up your book, reads your book and says, absolutely, I want to do lifestyle investing. Do you discuss in the book where persons should head to look for those investment opportunities?


Justin Donald: Yeah, so I give a few scenarios in the book of where someone can get started, how I got started, what other people have done different, you know, avenues that are available. And what I wanted to do is take it one step further. So I actually outline 12 investments that I did real investments, real terms, and exactly everything. So you can see it all broken down into the structure, the terms, you know, the length, the type, the perks, the negotiation that happened, what was before, what was after the negotiation. So everything’s in there, because I wanted a model that people could just copy. And if someone wants to do more, you know, they can always, you know, look into other programs and products that we have. But I wanted there to be enough content in the book that they didn’t have to and it gives them somewhere to go. And moreover, I just wanted something that could possibly change someone’s mindset, because once the mindset shifts, they’re gonna find solutions. And so that’s my goal is that it can be done differently than conventional investing than the way the financial institutions really influenced us as a nation to invest our dollars because they want them because they want to make a return.


Alan: You know, you mentioned as you started out, you were a voracious reader of books. And I imagine you’ve continued to read books over the years. What are some of your favorite books that have helped you the most?


Justin Donald: Well, I think the most profound aha moment that I had in reading a book came after reading cashflow quadrant, which is the one right after Rich Dad Poor Dad. And by the way, Rich Dad, Poor Dad was great for me, but, Cashflow Quadrant, was eye opening because I saw the tax advantages of being a business owner or an investor versus being employed, or self employed. And that just shifted my mindset where I started saying, maybe I’m on the wrong side of this. And actually, at the point in time that I read it. I would tell people I was a business owner because I thought that I was and probably most people would say that I was, but I realized if my business couldn’t run without me for a year, I was actually a sole proprietor. I was in the business. And without me, it didn’t work. And if I actually wanted to be a real business owner, then I would have to have a team that could run it, whether I’m there or not. And so that epiphany for me was massive. And I said, Wow, I’ve got to get on the other side. So I either need to build teams that run the organizations that I’ve started, or I need to invest in companies that already have a team in place, so that I’m not the one doing the work. And that really is kind of where it started. And then I’d say a nice follow up was everything I’ve learned, following Naval Ravikant and his new book, that’s out, The Almanac of Naval Ravikant. And I just think that that’s an incredible read too, for more of a philosophical standpoint.


Alan: So Justin, you have a podcast that you’re sharing information on and and for the listeners, how would they go ahead and find that and also reach out to you?


Justin Donald: Sure, well, I mean, my book is available on Amazon, so they could certainly go there. But for your audience, I’d love to give them a free copy, they just pay for shipping. So if they go to lifestyle investor book.com, that will give them everything that they need there. And then regardless of where they buy it from all the proceeds of the lifestyle investor book, all goes to charity. They go to an organization called, Love Justice International. And they’re there in 17 countries around the world stopping human sex trafficking of women and children. And so it’s just an incredible organization doing great work. So feel free to dig in there and know that the proceeds go to a good cause. And then my website’s JustinDonald.com, and I’ve got plenty of other programs and products on there and a bunch of free stuff for anyone that’s interested in learning more.


Alan: Well Justin, it’s been a pleasure having you with us today. And I love the advice and counsel you’re giving people through life of lifestyle investing and finding that financial freedom. Thank you for being with us.

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This transcript was generated by software and may not accurately reflect exactly what was said.

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan Olsen, CPA

Alan L. Olsen, CPA, Wikipedia Bio

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    Justin Donald on Alan Olsen's American Dreams Radio
    Justin Donald

    Justin Donald Bio Entrepreneur Magazine calls Justin Donald the “Warren Buffett of Lifestyle Investing.” He’s a master of low-risk cash flow investing, specializing in simplifying complex financial strategies, structuring deals, and disciplined investment systems that consistently produce profitable results. His ethos is to “create wealth without creating a job.” In the span of 21 months, and before his 37th birthday, Justin’s investments drove enough passive income for both he and his wife Jennifer to leave their jobs. Following his simple investment system and 10 Commandments of Lifestyle Investing, Justin negotiated deals with over 100 companies, multiplied his net worth to over eight figures, and maintained a family-centric lifestyle in less than 2 years. Just 2 years later, he doubled his net worth again. He now consults and advises entrepreneurs, executives, and successful media personalities on lifestyle investing. Justin has also appeared on nearly 100 podcasts, including Entrepreneurs on Fire, The Mike Dillard Show, Making Bank, Achieve Your Goals, Capability Amplifier, Tractionville, Inside Personal Growth, Conscious Millionaire, Franchise Secrets, the Accelerated Investor, and Unbecoming. Justin distilled his lessons and proven investment system that reliably generates repeatable returns into The Lifestyle Investor podcast and the best-selling book The Lifestyle Investor: The 10 Commandments of Cash Flow Investing for Passive Income and Financial Freedom, released in January 2021. The Lifestyle Investor was an instant hit, making the USA Today best seller list, breaking #8 on all of Amazon.com, and #1 on the Wall Street Journal’s best seller list. All proceeds from copies of The Lifestyle Investor go to Love Justice International, a nonprofit fighting human trafficking in 17 countries. Justin is a lifelong leader and trainer with a track record of achievement. In his 20s, he worked with Cutco/Vector and quickly became one of the top managers in the company, and one of the youngest to achieve Hall of Fame status. His personal playbook of best practices was deployed nationwide as a training program to onboard sales representatives. While in this role, Justin began investing heavily in real estate and owns several profitable real estate related businesses, a large portfolio of multifamily rentals, OrangeTheory Fitness franchises, and several other successful operating companies. His entrepreneurial ventures include IFM Restoration, a residential maintenance and rehab company founded in 2016. IFM recently funded its Series A with S3 Ventures, the largest venture capital firm in Texas, leading the round. Justin is a member of Tiger 21 and a board member of Front Row Foundation International. He and Jennifer contribute to various causes privately and through their church, fighting cancer, building clean water wells in third-world countries and other humanitarian efforts. Additionally, they sponsor multiple children through Compassion International. The Donalds are based in Austin, Texas, and love adventure-based international travel with their beloved daughter.

    Alan Olsen on Alan Olsen's American Dreams Radio
    Alan Olsen

    Alan is managing partner at Greenstein, Rogoff, Olsen & Co., LLP, (GROCO) and is a respected leader in his field. He is also the radio show host to American Dreams. Alan’s CPA firm resides in the San Francisco Bay Area and serves some of the most influential Venture Capitalist in the world. GROCO’s affluent CPA core competency is advising High Net Worth individual clients in tax and financial strategies. Alan is a current member of the Stanford Institute for Economic Policy Research (S.I.E.P.R.) SIEPR’s goal is to improve long-term economic policy. Alan has more than 25 years of experience in public accounting and develops innovative financial strategies for business enterprises. Alan also serves on President Kim Clark’s BYU-Idaho Advancement council. (President Clark lead the Harvard Business School programs for 30 years prior to joining BYU-idaho. As a specialist in income tax, Alan frequently lectures and writes articles about tax issues for professional organizations and community groups. He also teaches accounting as a member of the adjunct faculty at Ohlone College.

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